The U.S. stock market -- off to its worst start to a year ever -- saw an early rally fizzle out and finished sharply lower Friday after a big late-day selloff, dashing hopes for a market rebound despite a strong U.S. jobs report and a 2% rebound in Chinese stocks that had provided a brief but short-lived respite to a turbulent, historic week of trading.

The Dow Jones industrial average closed down 167.65 points, or 1.02%, to 16,346.45, putting it more than 10% below its record close last May and back in correction territory. The blue-chip barometer had been up by almost 140 points earlier in the session. The Dow finished the first week of trading in 2016 down 6.19% -- its worst five-day kickoff to a year ever, according to S&P Dow Jones Indices.

The late-day selloff was a "fitting end" to the Dow's worst opening week in history, Josh Selway, analyst at Schaeffer's Investment Research noted after the bleak week was over.

The massive selloff this week adds up to paper losses of roughly $1.5 trillion for the Wilshire 5000 Total Stock Market Index, according to Wilshire.

The Standard & Poor's 500 index tumbled 21.06 points, or 1.08% to close at 1922.03. The benchmark U.S. stock gauge fell 5.97% this week -- also a record-setting dive to start the new year. The Nasdaq composite index fell 45.79 points, or 0.98%, to 4643.63, falling deeper into correction territory.

“It's been a very rough start to 2016 for the global stock markets and I don't think it's over just yet,” Paul Schatz, president of Heritage Capital, told clients in a note after Friday’s closing bell. “This bout of weakness should spill over at least into next week before even a trading low is seen. From there, we will see when and how the market tries to hammer in a low and the quality of the rally that ensues. What we are seeing is a market event rather than an economic or systemic event. Think of it as a re-pricing of risk.”

Stocks got a big sentiment boost before the opening bell when the government reported that the U.S. economy created 292,000 jobs in December, way above the 200,000 estimate. But the early gains didn't hold up. Job gains were also revised up 41,000 in November and 9,000 in October. The unemployment rate stayed steady at 5% in December for a third straight month.

Investors were anxious ahead of the final trading session of the week in China after officials there suspended so-called "circuit breakers" that were blamed for causing panic selling this week that resulted in trading on the Chinese stock market to be suspended on Monday and Thursday. But investors got good news there, too. Shares of the Shanghai composite index ended up 1.97% Friday, capping off the worst week for the Chinese stock market in its short 25-year history.

But, while China's price action provided some stability to markets early in the day, the selling resumed in the U.S. late in the day as investors opted to take risk off the table heading into the weekend.

The gains in China sparked an early relief rally in Europe before gains faded and stocks turned lower late in the session and closed lower. The broad Stoxx Europe 600 index ended down 1.5% and Germany's DAX index dropped 1.3%.

Wall Street is now wondering whether the worst of the early-year drubbing is over or whether there is more pain to come.

Tech stocks and small-company shares have been hit even harder than the Dow and broad market.. The tech-packed Nasdaq composite is down 7.3% for the year and is down more than 11% from its July all-time peak, putting it back in so-called correction territory. The small-cap Russell 2000 stock index is down 7.9% in 2016 and 19.3% below its June peak and close to bear market territory, defined as a drop of 20% or more..

One reason cited for the stock market recovery in China earlier Friday is that central bankers set its currency, the yuan, higher vs. the dollar for the first time in nine days. The weaker Chinese currency was spooking investors, as it suggests the Chinese economy is weaker than believed as authorities take bold steps to jump-start slowing growth.

Market analysts have been saying that stocks around the globe had become severely "oversold" due to the intense selling to start the new year. Many were predicting a bounce of some sort would eventually materialize.

One market watcher urges investors to put the recent volatility in perspective.

Nigel Green, CEO and founder of financial advisory firm deVere Group, says "China’s seesawing market needs to be put into perspective," adding that the global sell-off this week was "excessive and knee-jerk."

Focusing only on the Chinese stock market is a mistake, Green says.

“Global investors," he says, "shouldn't be focusing so intently on the Chinese stock market, as the direct international effect of falling share prices in China is minimal.This is because there’s relatively little foreign money invested in Chinese stocks for it to be a major concern.

“Instead," Green adds, "they should be focusing on the Chinese economy, which is the world’s second largest. It’s the Chinese economy that ultimately affects the world markets and the world economy.”

CLOSE

Employers added 292,000 jobs last month underscoring that the U.S. economy remains strong despite uncertainty in China. How will Wall Street react?